While the S&P 500 is near all-time highs at the moment, there are plenty of stocks within the index that are miles off their highs. One such stock is Axon Enterprise (NASDAQ: AXON) – the global leader in public safety – which is about 40% below its highs.
Given its share price weakness, I’ve been buying shares in this company for my ISA aggressively over the last few weeks. And I’m not the only one who’s been snapping them up.
This company has enormous growth potential
In my view, Axon has a ton of long-term growth potential. Today, it has a range of state-of-the-art products designed to protect the public, including TASER guns, AI-powered police body cams, and anti-drone solutions.
Taking a closer look, some of its products are incredibly innovative. For example, Axon’s Guardian acts as an automated, real-time ‘digital partner’ for first responders, running continuously in the background on body cams to flag danger before an officer can manually call for help.
Then there’s Draft One, which takes audio transcripts from an officer’s body cam to instantly draft the narrative section of a police report. Axon claims this can cut report writing time by up to 70%, enabling officers to spend more time in the field and less time behind their desks.
It also offers Dedrone, which utilises machine learning to detect, track, identify, and mitigate drone threats. This is going to be protecting stadiums at this year’s FIFA World Cup and is also seeing interest from data centre companies.
New customers
It’s worth pointing out that Axon’s customers aren’t just government organisations/police. Today, private companies are adopting its solutions.
For example, companies like Walmart, Aldi, and H&M are experimenting with body cams in an effort to reduce theft. Research shows that when a confrontational customer or shoplifter realises they’re being recorded, their behaviour immediately shifts.
Revenues are soaring
Given all this innovative technology, Axon is seeing prolific growth. In 2025, for example, revenue amounted to $2.8bn, up 33% year on year.
This year, analysts forecast revenue of $3.7bn. Next year, they anticipate a top line of $4.7bn.
Why is the stock down?
So, why is the stock down if revenue is surging? Well, this company has been sucked into the software sell-off.
It seems some investors believe that AI is going to disrupt the business. I believe these investors have got it wrong though – I see this company as an AI beneficiary so I’ve been investing.
Who else is buying?
Baillie Gifford – which runs the Scottish Mortgage Investment Trust – has also been buying. According to regulatory filings, it snapped up 2.5m shares in Q1.
Another firm that accumulated stock in Q1 was Altimeter Capital. This is run by Brad Gerstner who’s a big name in the tech investing space.
Is there an investment opportunity?
Given the growth potential here, and the buying activity from major investors, I believe Axon shares are worth a closer look. To my mind, they offer a compelling investment proposition at current levels.
There are plenty of risks (including competition from rivals like Motorola) and investors need to expect share price volatility as the valuation is high. Taking a three-to-five year view, however, I expect them to perform well.
Should you invest £5,000 in Axon Enterprise right now?
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Edward Sheldon owns shares in Axon Enterprise and Scottish Mortgage Investment Trust
